Examlex
A firm increases its financial leverage when its ROA is greater than the cost of debt.Everything else equal this change will probably increase the firm's _______.
I.beta
II.earnings variability over the business cycle
III.ROE
IV.stock price
Level of Risk
The level of risk and possible monetary loss associated with making an investment choice.
Weighted Average Cost
A measure that calculates the average cost of goods available for sale, considering the weight of each unit's cost.
Cost of Equity
The rate of return that a company is expected to pay out to its shareholders for their investment in the company, factoring in the risk of the investment.
Cost of Preferred
This refers to the required return on investment for preferred stock, representing the cost to a company for issuing such stock.
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